[Click eStock] "CJ Daehan Tongun, Structural Increase in Parcel Volume"... Target Price Up

NH Investment & Securities maintained its buy rating on CJ Logistics on the 19th, considering the structural growth in parcel delivery and fulfillment, as well as the improvement in profit margins due to enhanced automation capabilities in contract logistics (CL). The target price was raised from the previous 114,000 KRW to 145,000 KRW.

Jeong Yeonseung, a researcher at NH Investment & Securities, stated, "Although the stock price has surged in the short term, we believe there is still room for further growth," adding, "Structural increases in parcel volumes due to changes in the e-commerce market such as AliExpress, growth in high-margin small parcel deliveries, additional pricing power from the advancement of fulfillment and parcel services, and increased lock-in effects have all contributed."

He continued, "The potential for margin improvement through enhanced automation rates is an investment point that can raise mid- to long-term valuation," and noted, "We believe these structural changes are not one-off issues but factors that can drive profit improvement through 2025."

CJ Logistics is expected to record sales of 3.0452 trillion KRW in the fourth quarter of this year, a 0.7% increase year-on-year, and operating profit of 139.2 billion KRW, up 23.9%. The company is anticipated to deliver solid results exceeding market consensus estimates, and despite the usual increase in costs such as performance bonuses in the fourth quarter, profit levels are rising across all business divisions, which is viewed positively.

Researcher Jeong added, "While the volume of direct purchase shipments has surged sharply, including AliExpress shipments, CJ Logistics' parcel volume in the fourth quarter is expected to decline by only 0.2% year-on-year, indicating a narrowing of the decrease," and "From next year, it is expected to turn positive, and the stock price de-rating (a phenomenon where the price-to-earnings ratio decreases) factor is also expected to be resolved."

This content was produced with the assistance of AI translation services.